Oil giants to face fury over £19bn profits

SHELL and BP are braced for renewed calls for another windfall tax when they announce bumper profits, expected to be about £19bn.

On Thursday, Shell is expected to reveal that it made £5.5bn last year - up £1bn on 2003.

But this will be eclipsed the following week when BP is expected to unveil a 42% leap in profits to about £13.5bn, a record for a British company.

The increase, buoyed by soaring oil prices, means BP is making more than £1.5m an hour. Chief executive Lord Browne recently described the flow of cash as 'staggering'.

The news, while delighting shareholders, is bound to anger motorists, who are paying nearrecord prices at the pumps.

Edmund King, executive director of the RAC Foundation, said: 'We all know that the Government takes the greatest proportion of the pump price in tax.

'But motorists will be surprised at these record profits as they thought higher prices were due to instability in the world market rather than increasing profits.'

The figures will also prompt calls for Government action.

Martin O'Neill, chairman of the Commons Trade and Industry Select Committee, last week suggested a windfall tax on North Sea oil and gas producers that have profited from big price rises in the past couple of years.

But the UK Offshore Operators' Association, which represents the oil and gas industry, said any new tax would badly damage investment in an ageing infrastructure.

The oil companies also insist that they are not profiteering from motorists and that margins on fuel sold on forecourts are tiny.

A recent survey by energy consultant Wood Mackenzie showed the UK had the cheapest pre-tax pump prices for petrol and diesel among 11 main EU countries.

However, it is unclear whether the findings take into account the billions of pounds taxpayers spend on securing oil supplies from politically volatile places such as Iraq and Saudi Arabia.

Meanwhile, Shell is expected to make yet another downgrade to its estimated oil and gas reserves. Three top executives quit last year after the company cut its estimate by 23%.

After checking 8bn of 14.35bn barrels of reserves, Shell said about 900m barrels could be cut from that total.